Ola Electric Shares Plummet 5.61% After Showroom Raids & Vehicle Seizures

Ola Electric Mobility faced a significant stock drop of 5.61% on Monday, closing at ₹53.36, following reports of raids at several of its showrooms across India. The crackdown by transport authorities led to vehicle seizures, citing a lack of required trade certificates.

Raids on Ola Electric Showrooms

According to Bloomberg, multiple Ola showrooms were raided over the past two days. Transport officials reportedly shut down several outlets that lacked proper business certifications and also seized vehicles. Additionally, the company was served a show cause notice by the transport department.

Lack of Trade Certificates in Showrooms

Since 2022, Ola Electric has opened around 4,000 showrooms. However, reports suggest that data is available for only 3,400 showrooms, and out of those, only 100 had the necessary trade certificates under the Motor Vehicles Act.

This means over 95% of Ola’s showrooms were operating without required documentation for displaying, selling, and offering test rides of unregistered two-wheelers.

Ola Electric Calls the Action ‘Unfair’

Ola Electric has strongly opposed the raids, calling them biased and misleading.

“This investigation is flawed and unfair. Ola operates a vast distribution network and warehouses across multiple states, where unregistered vehicles are stored legally,” an Ola spokesperson stated.

The company assured that it fully complies with the Motor Vehicles Act and holds all necessary approvals. However, it did not comment further on the showroom raids.

Ola Shares Down 65% From Peak

Since its listing in August 2024, Ola Electric’s stock has dropped 65% from its peak price of ₹157.53. In the past month alone, its stock value has declined by 20%.

Additionally, Ola Electric’s market share dropped from 49% to 23% by December 2024, reflecting a significant shift in the competitive EV market.

Mass Layoffs: 1,000+ Employees to Be Let Go

Reports also indicate that Ola Electric is planning layoffs affecting over 1,000 employees and contract workers.

The job cuts are expected to impact procurement, fulfillment, customer relations, and charging infrastructure teams. Sources claim that this move is part of the company’s cost-cutting strategy amid rising losses.